Employers in medium-sized businesses — those with 100 to 999 employees — might seem to offer a relatively small market opportunity when it comes to voluntary benefits, accounting for fewer than 8% of all businesses in the U.S. But considering their numbers, these employers have an outsized footprint in potential customers, accounting for 21% of all employees. Not only that, mid-size employers generate more than a quarter of all voluntary sales, according to Eastbridge’s most recent “Voluntary and the Mid-Size Case Market” Spotlight™ Report, topping $2.5 billion in 2023.
With those kinds of results, mid-size businesses offer an opportunity benefits advisors and carriers can’t afford to overlook. Here are five key things to know about this market:
#1: Mid-size employers are already familiar with voluntary benefits
A strong majority of mid-size employers offer at least one voluntary benefit to their employees, and 4 in 10 say they’re considering adding a new voluntary coverage. Mid-size employers offer voluntary benefits because their employees want them. Other key reasons include helping recruit and retain employees, addressing gaps in the plan, and improving the financial wellbeing of employees. In fact, employers surveyed are overwhelmingly more likely to say improved wellbeing and productivity is the most important outcome of offering voluntary benefits to their employees.
#2: At least half of employees in mid-size firms own at least one type of voluntary coverage — and they’re hungry for more.
Most employees at mid-size companies who have voluntary coverage own multiple products. The most popular tend to be life, accident and vision products. Employees list the reasonable cost of the coverage, the ability to fill gaps in their medical coverage, and the convenience of getting benefits at work and paying premiums through payroll deduction among their top reasons for buying voluntary coverage. Mid-market employees show significant interest in adding a variety of voluntary products in the future. Tops on the list are critical illness, cancer, identity theft, long-term care, and hospital indemnity coverage.
#3: Price and value are the most important factors for mid-size employers when choosing a voluntary carrier — but they’re far from the only key considerations.
A strong majority of these employers also rate many other factors — the quality of enrollment and communication materials, carrier support with communication and enrollment, and easy benefits administration — as extremely or very important. Also high on the list are the availability of tools and benefits advice, a reputation for high quality, and the availability of self-service options for employers and employees. In contrast, mid-size market advisors don’t list price as one of the top three criteria they consider in carrier selection. Instead, they lean more toward administration and service, product benefits and features, and integration with their client’s enrollment and administrative needs.
#4: Online services are increasingly important to mid-size employers.
More than two-thirds of medium-market employers say they won’t use a carrier that doesn’t offer online administration, or that having those capabilities definitely influences their decision, a significant increase from the previous survey of this group. Only 2% of mid-size employers say online services don’t matter to them. The most critical online services are those that help their employees: the ability to file claims, check claims status, find forms and materials, and view the benefits available on the products they purchase.
#5: Mid-size employers tend to use a voluntary carrier that provides one or more of their core products.
One reason for this may be that all mid-size brokers surveyed for Eastbridge’s 2024 “Rising Tide for Brokers in Voluntary Benefits” report say they sell voluntary products from the same carrier that provides employer-funded group products such as life and disability coverage. A strong majority of these brokers (87%) always or often bundle voluntary products with that carrier, and most say they bundle products at least occasionally with the carrier they use for the employer’s medical plan.
The mid-size market may not have the sheer volume of businesses and employees as the very smallest or largest markets, but it could hit the sweet spot for benefits advisors and carriers who understand the interests and needs of these firms.
Eastbridge has produced a “Voluntary and the Mid-Size Case Market” Spotlight™ Report for more than a decade. The report compiles research from multiple surveys to analyze the results and opportunities for selling voluntary benefits in the mid-size employer market, defined as businesses with 100–999 employees. Find information about how to obtain a copy of this report on Eastbridge’s website or email info@eastbridge.com to learn more.
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